MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.3%.
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“No one expects the Federal Reserve to hike on Wednesday and we would not be surprised if they refrained from providing any clear signal about their intention to raise interest rates before the end of the year”, wrote Kathy Lien, director of FX strategy for BK Asset Management. Reference to a particular meeting is rare for the USA central bank. “The market has been forced to reset its view on central bank differentials”.
However, it dropped to 120.69 yen on Thursday in Tokyo, while the euro was slightly higher at $1.0928.
The dollar index, which tracks the United States unit against a basket of six of its major peers, was down about 0.2% at 97.594, but still not far from a two and a half month peak of 97.818 scaled after the Fed’s message.
The prospect of higher interest rates set off a rally in banks, which stand to make more money on lending.
“While it can be argued that stimulus overseas is good for USA markets and makes it easier for the Fed to raise interest rates in December, the reasons why these central banks are easing and the consequences for the dollar could also deter them from tightening”, said BK Asset Management’s Lien.
Twitter plunged 6 percent after issuing a revenue forecast that fell short of what investors were looking for. Brent crude, which is used to price worldwide oils, rose $1.24, or 2.7 percent, to $48.06 a barrel in London.
USA crude was up about 0.2% at $46.01 a barrel.
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The New Zealand dollar was down about 0.4% at $0.6671. Meanwhile, Japan’s Nikkei share average rose to a fresh two-month high after China’s surprising rate cut lifted risk sentiment, while bellwethers Hitachi and Panasonic Corp surged on stronger earnings expectations.
